For Tom, it was 10% which is probably a good rule for most beginning investors. But when you use charts to time your purchase more accurately, I recommend cutting all losses at 7% or 8% below your purchase price. By doing this, you are taking out little insurance policies to protect yourself from possible substantial losses.
If you let a stock go down 50% from where you bought it, you must make 100% on the next stock just to break even. Now, how often do you buy stock that double in price? It is only by using our Stock Alert on by signing up our newsletter above.
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